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Bankruptcy Lanigan & Lanigan, P.L.
831 W. Morse Blvd., Winter Park, Florida 32789



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Acceleration Letters Are Key in Halting Foreclosure Actions

Real estate, bankruptcy, foreclosure and business lawyer Eric Lanigan has practiced Florida law since 1976. Lanigan and Lanigan in Winter Park, Florida, has handled many foreclosures since the economic changes effected Florida’s real estate crash in 2005.

He’s going to explain one of the very early stages of the foreclosure process:  the acceleration letter, sometimes is called the 30-day letter that you sometimes receive from a mortgage lender.

What is an Acceleration Letter?

What is it? It’s basically the letter that notifies you that according to the lender you’re in default it sets forth the requirements to cure or fix the default. You might think of it sort of the equivalent of the Miranda rights of foreclosure. 

Why You’re Getting the Letter?

You’re getting the letter because typically if you have this sort of standard, uniform mortgage which is the document approved and required by Fannie Mae and Freddie Mac there’s a paragraph in there it’s typically paragraph 22 which sets forth the requirement that the bank must fulfill to notify you of the default and their intent to accelerate.

Now why is that important? It’s important because the Florida courts have ruled recently and consistently that the banks must strictly comply with this provision of the mortgage. Now remember this is their mortgage, they put this provision in there and therefore they must strictly comply with it.

Most Acceleration Letters Are Defective

The other important thing about it is almost everyone of these letters is defective. If you followed strictly down the line of the I’m going to call it paragraph 22, the requirements of the acceleration letter, the letter does not comply with the bank’s own mortgage language. So what’s the end result if in fact the letter is defective?

Well the remedy that the court must apply is dismissal of the foreclosure action. Not stop the foreclosure action so they can go back and send a new letter that fixes the mistake.

Because remember the proper notification was a condition precedent to filing of the lawsuit. In other words it’s something that has to be done before they have the right to file a foreclosure action. So the proper remedy that the courts apply is to dismiss the foreclosure action.

Dismissal Without Prejudice

Now does that suddenly mean that you have the house free and clear? No because that dismissal is what we call without prejudice. It means that the lender can refile the foreclosure action after they have complied with the proper acceleration letter. Now the significance of that is it will take a significant amount of time and because you have now won or are the prevailing party in the first foreclosure action you’re entitled to recover all your fees and costs incurred in defending that first foreclosure action before the bank can file their second action.

Statute of Limitations

Now so what if it has been more than five years since your last payment on the mortgage since you went into default? Well the statute of limitations in Florida is five years. So if they now have to refile the lawsuit and it’s been more than five years, you now have an entirely new defense.

And it is a catastrophic defense from the bank’s perspective and that is that they cannot pursue the foreclosure action because the statute of limitations has run. And if they can’t sue to collect on the note then they can’t foreclose on the property. So if there’s no suit on the note, there can’t be a foreclosure action. Therefore they can’t proceed at all. They’re frozen. 

File Quiet Title Action

The next step would then be for the homeowner to file a quiet title action to remove the mortgage lien because the mortgage lien cannot be enforced so the end result there is no debt, no mortgage.

So I caution everybody if you’ve got that acceleration letter, keep it. It could be vitally important in the defense of your foreclosure action. And if you’ve already gotten it, go find it because it’s going to be a very important tool down the road if it’s used properly.

Only an Experienced Lawyer May Execute This

And that’s another thing: This is not something that you try at home on your own. There’s a very specific strategy that one must use and when and how to bring up the failure to comply with the original requirements. So I would advise you get that letter if you’re in foreclosure or you’re about to be in foreclosure make sure that your attorney has that letter.

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